Archive for the ‘Marine industries’ Category

We’ve been doing some research on governance structures operating around the world, looking for ways of addressing the slow progress of marine disaster relief and maritime safety in the Pacific and Africa regions.

And we stumbled across this European Network, whose aim is to promote and reinforce the various Maritime Clusters and players therein. They set up a network, rather informal at the beginning, to create a link, to be reinforced year after year, between national cluster organisations.

As its website (www.european-network-of-maritime-clusters.eu) explains, ‘the purpose is to put the entirety of the European maritime cluster on the map…the Network provides a platform from which joint activities can be developed.’

The organizers emphasise that the Network is not to replace the maritime branch organisations which have existing representation and lobbying structures in place. Membership means that it is easier for the organizations to attract EU authorities’ attention.

Similarly the Network can assist the European Commission and others in pursuing integrated development approaches by:
A. pushing the national clusters to organise the various maritime players within their boundaries.
B. bringing the national clusters together to drive stronger collaborative outcomes.

The EC has a lot to offer in terms of maritime technology and this Network concept is worthy of close attention in other sectors as a mechanism for addressing coordination failure.

The Cockatoo Network is currently devoting considerable resources to identifying mechanisms to encourage cross-border collaboration. Here is an interesting example involving two world-class nodes. It appears that one of the triggers for the relationship was Paul “Red” Adair, a great Houstonian, who made his name in Norway by resolving the Bravo Oilwell Blowout of 1977.

The Houston Chronicle recently ran an article as follows.

Norway and Houston have long-established and strong ties. Business is, and has always been, at the heart of our relationship. More than anything else, our relations have been influenced by shipping and oil.

Houston is a global maritime and offshore oil powerhouse and Norway’s third-largest U.S. gateway for seaborne trade. Last year, 579 Norwegian ships called at Houston, representing some $760.4 million worth of seaborne trade. Many Texas-based companies, such as Exxon Mobil, ConocoPhillips, National Oilwell Varco, Marathon Oil and FMC Technologies, have made major investments and built up significant operations in Norway. Moreover, technology transfer from Texas was essential to the Norwegian oil industry in the 1970s. The experienced oilmen who laid the foundations of the Norwegian offshore adventure were, to a large extent, Texans.

Houston is home to the largest concentration of Norwegian energy companies outside Norway. Furthermore, about 7,000 Norwegians today live and work in the Houston region, mostly in the energy, maritime, space and medical fields, as well as in higher education and research. Some 140 Norwegian companies have a presence in Houston, creating a number of workplaces.

Stu Rosenfeld (Cockatoo member) has a report out very shortly – entitled “Generating Local Wealth, Opportunity, and Sustainability through Rural Clusters” – funded by the Ford Foundation. The topic is extremely interesting given the enquiries we field. As usual, Stu gets to the nub of the issue. Excerpt below.

According to most reasonable measures, requirements for critical mass or scale would seem to rule out almost all clusters in sparsely populated areas. If the criteria are relaxed, then what scale must a cluster have to generate synergies? It may seem surprising that given the large volume of empirical work on agglomeration economies, no one has satisfactorily identified that level of activity that achieves significant economies of scale and synergy among members.

The advantages of agglomeration vary widely by industry, but they also represent a continuum; the larger the scale of demand, the deeper access to specialized services and resources becomes. The critical mass necessary for one type of resource may be less than that for another. A community college may offer specialized programs for a certain cluster, even one lacking sufficient scale, if it can draw students from other regions or industries with overlapping needs. Piedmont Community College in Yanceyville, North Carolina has programs in film and multimedia that draw from the nearby Piedmont Triad and Research Triangle areas.

The number of interdependent enterprises necessary to be considered a cluster depends in part on the size of place and level of market penetration. In less populated areas, smaller numbers of similar companies — such as the 11 houseboat builders around Lake Cumberland, Kentucky that dominate the high-end boat market — constitute a significant local cluster with a very specific product and market. As few as two companies have been designated a recreational transportation equipment cluster in northwest Minnesota. Two large manufacturers employ about 3,200 people in this rural area, use local suppliers, and have a demanding local snowmobiling culture to drive innovation. Thus, for the most part, one knows sufficient critical mass when one sees it or one names it, and a precise definition is not possible—and perhaps not even necessary.

Further, needs for critical mass depend in part on willingness of companies to cooperate. The greater the willingness to cooperate, to intentionally pursue economies of scale, the smaller the numbers of firms needed to have “critical mass.”

Cockatoo has a Cluster ScoreCard which is basically an advance on Porter’s Competitiveness Diamond – we use it to objectively analyse a cluster, to highlight deficiencies, and to formulate Action Agendas.

This month we feature the Perth defence-marine cluster. It rates at 76.9 out of 100 points on an international scale of cluster performance – it compares favourably with other recent ScoreCards viz. Horticulture, Virginia SA (71.5), Mining Technology Services, Perth (70) and Advanced Manufacturing, Adelaide (70.2).

Key factor conditions underpinning its development are:

§Longstanding maritime history centered on the Port of Fremantle.

§The Two Ocean policy, whereby half the RAN fleet is located at HMAS Stirling (Cockburn Sound).

§The success of the WA-based America’s Cup syndicate in the 1980s.

§The establishment of the Australian Marine Complex at Jervoise Bay.

Its relative strengths are critical mass of local suppliers (9.7/10), growth prospects (9.2/10) and social capital (8.8/10), while its relative weaknesses are lack of threat (5.0/10) and governance structures (6.0/10).

Perth is a world-class location for defence and marine activities due to its deep water port, significant tracts of relatively cheap industrial land, and first port of call for international shipping services. Perth also has a well-developed road and rail system to the eastern states, and good air links to Africa and Asia.

It has two under-appreciated competitive advantages – 4 hours closer to Europe, Africa, Middle East etc. than Australia’s eastern states, and its geographic isolation provides relative security for defence installations.

Perth has around 370 firms involved in the defence and marine industry – which is greater than for Adelaide, and on a par with Melbourne. The marine/shipbuilding segment in Perth directly employs 2,500, and indirect employment is around 6,000. The defence industry segment accounts for a similar level of employment.

From our archives, we have accessed a very interesting overview of Louisiana’s approach to this industry. It was highlighted by at The Competitiiveness Institute conference in Tucson a couple of years back by David ‘Preacher’ Dodd, the US economic development and cluster expert. Herewith a summary of his riveting story (excuse the pun) and please note that this was pre-Katrina.

What happens when cluster logic takes hold organically? In early 1998, the shipbuilding boom in the bayou region of southern Louisiana was creating serious problems that posed a threat to the future of the industry – based in the local government areas of St Mary, La Fouche, Terre Bonne and Assumption.

Due to robust growth in the shipbuilding and oil/gas industries, a serious skills shortage had developed. The subsequent poaching of staff, active and strident competitiveness, bidding wars, development of “fly in- fly out” labor teams that gave nothing back to the resident communities, and the impact on labor costs had all the earmarks of serious industry and community dislocation.

In addition, the geography of this wide marshy area of the Mississippi Delta meant there was physically no room for expansion to service the burgeoning demand. This was compounded by the cyclical nature of these businesses, which caused only very cautious investment capital to be available.

Vic LaFonte is the economic development professional of the South Louisiana Economic Council. Anticipating serious economic impact, he contacted me to brainstorm some solutions. The suggested solution was to motivate the metal working sector in Northern Louisiana to join forces to meet the demand in the south. The north still had under-utilised capacity from the 1980’s oil and gas boom. There were still skilled workers in the region.

The plan was to integrate clustering dynamics to form a network in the north to respond to the need in the south, and nurture collaboration between the two networks so they could develop the trust and identify common needs that would accelerate cluster development. Using funds from the Department of Economic Development, the project started.

The first meeting was at Minden and in attendance were 15 firms, whose employment ranged from 10 to 500. The atmosphere was conservative and guarded. There was an identified concern about being in the same room with competitors to discuss industry development opportunities. However, after careful explanation, a second meeting was agreed at which the issues would become more specific.

The second meeting saw 12 firms in attendance. It was polite, but no progress until one business owner, Brad Reynolds of Reynolds Machinery, clicked to the concept. He told his peers that he was sick to death of each of them trying to cut each others’ throats when the real competition wasn’t in this room but from the world market. He told them he was “in” and he hoped they all would join him.

This was the turning point. The others quickly agreed to a meeting with the southern shipbuilding industry sector.A membership agreement was drafted and reviewed at a 3rd meeting. Before the meeting, the industry hit a serious downturn…the pressure that created the opportunity was released – this removed the opportunity to fill a gap, since there was no longer a gap in demand for labor and resources.

Members of the initial group, having formed to identify broader opportunity, continued their dialogue after external facilitation stopped. They truly understood the need to collaborate. They formed the Ark-La-Tex Businesses Consortium by teaming 3 companies. Together they have weathered a cyclical industry and are quoted as saying “the key ingredient is trust”.

This is a useful example of facilitation being a catalyst to cluster development but the real core activities MUST be driven from within.

Who and where are you? Jim Fountain, Gold Coast City Council, Australia

What’s your job? To promote the region as a business location by establishing and maintaining contacts in the business community and assisting industry to establish and/or expand their operations in the region. Major focus on the marine industry and export development.Grew up in Melbourne and an early starter in snow skiing. Competed in still water and surf swimming events, winning a number of Victorian championships and an Australian interstate championship. Represented Victoria six times before winning a sports scholarship to an American university. Spent over four years in various parts of the USA. Worked with the AFL Bears, Griffith University.

What collaborative projects do you have to interest Cockatoo readers – Ausindustry has been a close collaborator, as have Gold Coast universities. Industry clustering is a focus – we are thus interested in sharing ideas with other cluster groups, and to facilitate international JVs in education, marine, health/medical, creative industries, food manufacturing, environmental industries, tourism, sport and ICT. Open to any suggestions. Cockatoo’s Thinker-in-Residence proposal could be VERY relevant to you! A working holiday in Australia’s top leisure region!

The Seine-Normandie Logistics Competitiveness Cluster (LSN) was established in 2005. It has 5,000 companies in Haute and Basse Normandie, employing 80,000 jobs.

The aims are to:§Identify innovative logistic projects.§Promote skills and improve performance of member logistics companies.§Provide economic monitoring.§Meet the employment/training needs of professionals in the sector.

The emphasis of the cluster is on traceability and information systems. Its CALAS project deals with a laser triangulation prototype at the Normandy terminal, offering real-time tracking of thousands of containers in a port and improves customer service.

Contact : Adeline GENAUD(An attempt was made to establish a logistics cluster around Melbourne airport around 2001 – Editor).

We are THE experts in international networking
– for more information, contact us at apd@orac.net.au or ring 61-2-62317261

The two groups are not the same! Many of the physical clusters have developed without formalised structures, and most of the players were never involved in formalised meetings.

Outlined below are our top 10 physical clusters in Australia – it is necessarily subjective, and we welcome correspondence if you agree or not! The common characteristics are lengthy gestation periods, champions, and triggers that generate further investment and economic spillovers. Interestingly, many of the triggers came from the public sector.

1.Cairns Airport/City Port(Qld) – infrastructure and local leaders have spurred tourism development and seafood and horticulture exports. The City Port project has transformed the foreshore and CBD. The trigger was Townsville winning state/federal government blessing in the 1980s as the regional aviation gateway. Bob Manning (then CEO of Cairns Airport) led the charge. The airline pilots strike and recession in early 1990s were further triggers.

2. Jervoise Bay(Rockingham, WA) – precinct designed to capture commercial opportunities associated with nearby defence and marine facilities, local engineering and shipbuilding companies, concrete platforms for the North West Shelf etc. The trigger was competition from Singapore, which led to visionary plans by WA Government, which then negotiated and matched an $80 million federal grant.

3. Melbourne Docklands and Southbank(Vic) – transformed this area from an embarrassment to a highlight. It gels with the MCG, the Tennis Stadium and the parkland areas. The trigger was the commitment of a Victorian Planning Minister and his officials in early 1990s.

4. Port Lincoln (SA) – a great example of industry putting its money where its mouth is. A network of professional fishermen saw the need to invest in R&D and training, and well-argued submissions backed by business plans attracted federal and state assistance for a multi-faceted Marine Centre.

5. Scone Equine(NSW) – local and overseas breeders are clustered here. The trigger was local government leaders who mapped out infrastructure requirements and an ingenious funding mechanism for a research centre. A world-class training track, a TAFE and a convention centre reinforce each other.

6. Canberra Airport (ACT) – the trigger was the sale by the federal government to the Snow family in 1998. This has led to a further $500+ million investment in the terminal, hangars, apron, roads, car parks, and Business Park. Consultancy businesses, freight forwarders, defence contractors etc. now operate on-site.

7. Shepparton (Vic) – a very strong food processing cluster involving around ten significant multinationals. The trigger has been water infrastructure installed in stages since the 1960s. A major road freight hub has also developed there due to backloading opportunities.

10. Honeysuckle urban renewal project(Newcastle, NSW) – intelligent town planning and cocktail funding across three levels of government and the private sector. The trigger was exit of BHP Steel and job losses, which led to ‘Better Cities’ funding and a federal/state/BHP restructuring fund.

In 2005, we identified Australia’s top 10 physical clusters. I was inundated with queries about my parentage and sexuality. Below are some of the respectable replies.

“Armidale NSW has established excellence livestock research and its worldwide application, particularly in genetics research and beef quality (CRC), beef cattle performance and breeding technologies. Most of the main cattle breed societies have located in Armidale. To a lesser extent, these technologies are applied to dairy cattle, sheep and other livestock. Also, Narrabri has become a national centre for research and development of cotton (CRC) and the various technical services that underpin world class production of cotton. Many of the post-farm handling and marketing operations are also locally based.”From Roy Powell at CARE Armidale NSW 2350 Ph: (02) 6771 3833 www.care.net.au

“I just received your recent publication re clusters and in particular, physical clusters. I think you have missed a beauty i.e. the Gold Coast Marine Precinct at Coomera. Been established about 5-6 years from absolutely nothing and now about 70 marine firms there, close on 3000 employees, private investment of $175 million plus and probably up to $175 million in export turnover.’ From Jim Fountain at Gold Coast City Council – jfountain@goldcoast.qld.gov.au

“Sometimes clusters emerge ‘by accident’ and one of the most important I’m aware of – certainly in terms of cluster size relative to the size of the host economy – is Armidale’s beef cluster. This brings together the CRC for Cattle and Beef Quality hosted at the University of New England, the Animal Breeding and Genetics Unit (AGBU), Agricultural Business Research Institute (ABRI), the Beef Industry Centre of the NSW DPI, and numerous headquarters of cattle breed societies (e.g. Hereford, Angus, Charolais, and Limousin). I suspect that these also dovetail in with wider research on expert farming systems and other livestock CRCs for sheep and poultry.Armidale hosts the intelligent end of the beef business.None of this was planned synoptically. It just happened.” From Tony Sorensen atUNE’s School of Human & Environmental Studies – Tony.Sorensen@une.edu.auu

Tony McLennan, editor of ‘Growfish’ has sent us a very timely article from the Straits Times.

Small-scale fish rearers along Sungai Pahang, Malaysia’s biggest river, face logistical difficulties marketing their produce.Wholesalers have been reluctant to buy fish from them due to insufficient quantities and their scattered locations. The problem has eased since most of the 32 fish rearers have regrouped into four clusters, each with its own “transit cage” supplied by Federal Agricultural Marketing Authority (Fama).

Under the “cluster-cage” concept, Fama will obtain its fish supply only at selected locations near the road. Fish rearers will be informed a few days before we come so that they can bring their fish to the transit cage.

Although there are about 200 fish cages there, most of the rearers own just two or three. The cluster-cage concept enables the rearers to concentrate on improving their produce. “We don’t have to think about the marketing aspect anymore. The most important thing for us now is to produce high-quality fish.” said a local, who owns 10 cages. He previously had to go to Kuantan or Kuala Lumpur to sell his fish. A Fama official said the concept had been expanded to Maran and Kuantan. “We can’t go and buy fish from individual rearers. That is why we have to treat them as a big group supplying more than 400kg of fish each time we come to collect their produce,” he said.

There are 219 fish rearers in Pahang with 1,636 cages. Fama also plans to formulate a new type of fish feed so that rearers can harvest their fish every four months instead of 6-9 months at present.